BASF: Market environment remains volatile and challenging

Registered for use in Canada does not mean 'okay to use' in a crop that is 90 percent exported


Status of quinclorac acceptance in China highlights complex canola export issues


Mississauga, ON, February 17, 2016 – Canola is a uniquely Canadian success story. It's the number one revenue generating crop in Canada, contributing $19.3 billion to the Canadian economy each year and resulting in almost one-quarter of a million jobs.


Acres have grown as demand from China, the United States, Mexico and Japan have increased. Together, these four countries make up the bulk of the 90 percent of our canola crop which is exported.


Keeping the door open on the export markets that sustain the Canadian canola industry and propel its growth is no small task.


The Canola Council of Canada works with the entire canola value chain - including regulators in our key export markets - to protect Canada's reputation as the premier supplier of high-quality canola.


While technology has helped Canadian canola growers produce a sustainable crop and ever-increasing yields, it is a double-edged sword when products that are registered for use in Canada have not yet been fully accepted by the regulatory bodies in our key export markets. This is the case with quinclorac, an active ingredient that is very effective for cleaver control but does not yet have import tolerances or maximum residue limits (MRLs) established in China and other canola export markets.


Considering that China imports one-third of the canola we produce in Western Canada, this is cause for concern.


In fact, these export issues prompted the Canola Council of Canada to recommend that growers do not use quinclorac in 2016.


"Global markets are critical to the success of the canola industry," said Patti Miller, President of the Canola Council of Canada. "The entire value chain needs to work together to prevent export risk and maintain Canada's reputation as a high-quality canola supplier."


The Canola Council noted in its January advisory that there is a shared responsibility among everyone in the canola industry - from life science companies to growers, elevators, processors and exporters - to work together to ensure Canadian canola markets aren't put at risk by jumping the gun on use of products that haven't yet met food and safety requirements in major export destinations.


The Canola Council of Canada advisory summed it up, "Data from the 2015 growing season confirmed that quinclorac leaves residues that can be detected by today's testing equipment - not just in the canola seed, but also in the processed oil and meal. Therefore, the value chain believes there is a significant risk to Chinese exports if quinclorac is used on canola."


The Canola Council utilizes its 'Keep it Clean' campaign and website to help educate canola growers, processors and others involved in the industry about the issue.


"The bottom line is 'Registered for use in Canada' does not mean 'okay to use'," said Christine Headon, Regulatory Product Manager at BASF Canada, who is intimately familiar with the quinclorac issue.


Regulatory status in export destination key


Headon noted that BASF is working to establish MRLs for quinclorac in all of the major canola export markets, regardless of the formulation. She said a lot of progress has been made but anticipates it may be 2018 before the risk of rejected shipments and damage to Canadian canola's reputation can be fully averted.


Chris Vander Kant, the BASF marketing manager for Facet L, BASF's herbicide with the active ingredient quinclorac, amplified the point. "BASF makes significant investments of time and resources to ensure substantial research and development in all products. But more than that, BASF works to be responsible stewards of the industry and the approval process for Facet L is a prime example."


Vander Kant elaborated, "While we know Facet L is a needed technology for canola growers in Western Canada, we also know that we need to work with the Canola Council, exporters and growers to ensure we can bring this new technology for canola forward without jeopardizing the marketability of Canada's canola success story on the world stage. As a result, BASF will continue to invest in the establishment of the necessary MRLs prior to launch."


BASF and the Canola Council aren't alone in sounding the alarm bells. Members of the Western Grain Elevator Association have amended their Declaration of Eligibility for Delivery Form, asking growers to identify use of quinclorac.


"It's a very serious issue," said the Canola Council's Miller. "Our export customers test shipments regularly to make sure their standards are met and the tests are becoming more and more precise." She warned, "If a shipment is turned back because of an unacceptable residue, it can mean millions and millions of dollars, not only to the exporting company, but to farm revenue."


That's why the Canola Council stresses the importance of working with the value chain to prevent market access issues. "And that's why establishing import tolerances in necessary Canadian export markets prior to launching a new product is imperative to BASF," said Vander Kant.


© 2016 BASF Canada Inc.